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Of Special Interest ...examining a significantly timely topic

Jan 19 2021

Factors: Ain’t Misbehavin’

  • Jan 19, 2021

Investment styles and factors are generally interpreted as having an inherent preference for either bullish or bearish market environments. The theoretical tilt of each style is based on its design and its sensitivity to economic, profit, and valuation cycles. However, theory and practice do not always agree, and we must look to actual performance to confirm our impressions.

Jan 07 2021

Research Preview: Factor Standings For 2020

  • Jan 7, 2021

As we review factor and style returns for 2020, it occurs to us that the “whole” is much less interesting than the sum of its parts. Many factors are considered to be either bullish or bearish in temperament, and last year’s round-trip offers an opportunity to test the reliability of those characterizations.

Dec 04 2020

Research Preview: Rotating Away From Growth

  • Dec 4, 2020

This study examines Value, Small Cap, and Emerging Markets to see if they do, in fact, behave in a correlated manner when viewed as alternatives to Large Growth. The goal is to determine whether this trio of rotational favorites can be considered as broadly-equivalent replacements for LG.

Nov 05 2020

Research Preview: A Surprising Dividend Study

  • Nov 5, 2020

Dividends are a cornerstone of equity investing and, over the decades, they have produced a significant portion of the stock market’s total return. Previous Leuthold research has identified a strong dividend influence on total returns for small and mid-caps; a client recently asked if we found the same effect in the universe of S&P 500 companies. Specifically, have S&P 500 dividend-payers outperformed non-payers, and, second, have dividend growers outperformed non-growers?

Oct 06 2020

Research Preview: 2021 Earnings Breakdown

  • Oct 6, 2020

Earnings estimates for 2021 are being projected above the records posted in 2018 and 2019. We ask the question, “How do we get there?” Here we present an introduction to this topic that we will examine at length and provide a full analysis in mid-October.

Sep 04 2020

Research Preview: Not Your Parents’ “Discretionary”

  • Sep 4, 2020

The combination of rebounding economic activity and a surging enchantment with mega-cap growth stocks is pressing investors to make an important tactical call: whether or not to exit some highfliers and shift assets to sectors with more cyclical exposure.

Aug 06 2020

Research Preview: Growth, Pure And Simple

  • Aug 6, 2020

Growth investing is in the midst of a record run this year, extending its decade-long dominance over the Value style.

Jul 07 2020

Preview: The Importance Of Quality In Small Caps

  • Jul 7, 2020

One of the signature traits of the U.S. small cap market is the prevalence of money-losing companies. Our recent tally indicates that even prior to COVID-19, 38% of small caps were reporting trailing year losses despite the widespread economic strength of 2019.

Jun 04 2020

Small Cap Valuations: Zombies And Ragamuffins

  • Jun 4, 2020

Asset allocation decisions are fairly straightforward for groups of profitable and growing companies that fit nicely into a discounted cash flow model, but it is more difficult to describe the valuation of groups that include unprofitable companies.

May 07 2020

Siege Protocol

  • May 7, 2020

This study examines the traditional protocol for bear markets to find which tactics worked as expected and which were caught misbehaving. Overall, we conclude that investors were not ready to commit to a full leadership rotation.

Apr 06 2020

Leadership Rotation And Bear Markets

  • Apr 6, 2020

Bear markets are the financial system’s version of the changing seasons—a cycle we “enjoy” to extremes here in Minnesota.

Feb 06 2020

A Storied Bubble’s Pearl Anniversary

  • Feb 6, 2020

The decade of the teens has given way to the decade of the twenties and “year in review” retrospectives are in the books, but as the calendar’s last digit rolls from 9 to 0 we consider one more anniversary worth remembering.

Jan 08 2020

Preview: Small Caps—Part 2

  • Jan 8, 2020

In response to client queries, we extended our research of small cap equities from last month. One angle we pursued was the relationship between small caps, quality, and business risk. The full report will be released mid-month.

Nov 07 2019

U.K. Stocks: Bottom Fishing… & Chips

  • Nov 7, 2019

A preview of the upcoming Of Special Interest that will examine if the tortured process of Brexit is creating an opportunity to bottom fish washed-out and unloved U.K. stocks. Time to buy?

Oct 05 2019

A Most Peculiar Day

  • Oct 5, 2019

Something remarkable occurred on September 9th. Momentum crashed and Value soared on that Monday, in what one analyst described as a five standard deviation event. Do we have a clear understanding of what really happened? This research project takes a multi-faceted look at what transpired during one unusual week in September.

Sep 06 2019

Factor Trade-Offs

  • Sep 6, 2019

A major difficulty in picking stocks based on quant factors is the need to make trade-offs. A company that looks attractive on one preferred metric will likely look unattractive on another. This study examines the uncomfortable give-and-take that complicates factor investing at the stock level.

Aug 07 2019

Portfolio Positioning: Deciding Not To Decide

  • Aug 7, 2019

One portfolio strategy that attracts our interest is a barbell between Growth or Quality on the bullish side, paired with a Low or Minimum Volatility sleeve for the bearish side. This approach deals with today’s uncertainties by essentially “deciding not to decide.”

Aug 15 2019

Can Equity Investors Eat Their Cake And Have It Too?

  • Aug 15, 2019

Investor sentiment seems to be unusually conflicted these days. There are worries aplenty, including numerous political skirmishes of consequence around the world, a slowing global economy, and lofty U.S. equity valuations. On the other hand, fiscal stimulus is high for this stage in an economic cycle and the Fed is easing monetary policy, two policy drivers it rarely pays to bet against.

Jul 11 2019

Lessons From The Old Masters: John Neff

  • Jul 11, 2019

A recent trip to the Netherlands included visits to The Rijksmuseum and The Mauritshuis to view paintings including The Night Watch, widely acclaimed as Rembrandt’s greatest work, and Vermeer’s equally celebrated Girl with a Pearl Earring.

Jul 03 2019

Lessons From The Old Masters: John Neff

  • Jul 3, 2019

We believe the results of every investment operation depend, more than anything else, on the quality of the investment philosophy and process that drives the portfolio.